“We have entered into several transactions with our Co-Founder and Chief Executive Officer, Adam Neumann, including leases with landlord entities in which Adam has or had a significant ownership interest. We have similarly entered into leases with landlord entities in which other members of our board of directors have a significant ownership interest.”
“We’re going to take that investor cash and rinse it with this one weird trick and then the board and ceo will personally benefit.”
I mean sure, they’re losing about $5k per customer, but just think of all the customers they’ll gain when you invest at a rate of $90k per customer. Can I get some of those investors?
That is astounding to me. But then again one of their offices is down the street from me. However, my social media feed is filled with their ads. Perhaps that’s because I’m a working professional in an urban area? To me, WeWork is ubiquitous.
I suspect that this is why their materials absolutely hammered on the theory that they were a hip tech company rather than a real estate management firm that is terrible at its job.
Investor tolerance isn’t it unlimited; but it seems to be a lot higher if you are definitely in the business of the cyber.
Unless you are some boring old company that actually has massive amounts of line of business software and automated processes; but does something boring and profitable. Then you are 100% not in the business of the cyber, because reasons, even if you actually use more software. It’s just economics or something.
Well “as a founder-led company”, of course you believe the founder having complete control is best. Arguing that it aligns with creating shareholder value would be nice if you didn’t also admit (as you are legally required to do) that the co-founder and major shareholder is pulling money out of the company in undisclosed but presumably non-zero amounts.
This on the other hand is exactly the sort of thing that makes me want to throw up at the thought of working in certain industries:
WE DEDICATE THIS
TO THE ENERGY OF WE -
GREATER THAN ANY ONE OF US
BUT INSIDE EACH OF US
I’m sure knowing that makes working in one of the spaces so much better.
To be fair, seeing it like that doesn’t really get across the soulless horror of how it appears in the prospectus. The dead beige background, the shonky font and the juxtaposition of the little poem/haiku ‘dedication’ with the logo on the opposite page…
Before they then launch into a whole bunch of tech-bro, IPO jargon and puffery carefully swirled around the legally mandated admissions that they don’t actually make any money, never have and have no intention of doing so any time soon.
Where it gets really crazy is the fact that Neumann has de-facto dictator status and the company leases a substantial portion of its buildings from him. As best I can tell, Mr. Neumann has basically figured out a way to get Softbank to loan an entity he controls some billions of dollars to lease assets he controls for purposes that have no realistic chance of ever making it into the black.
I assume that this is legal, or they probably would have been cagier about openly writing it out in their S-1; but it stinks to high heaven and makes me wonder why anyone would put up with it.
Even if you think that ‘space-as-a-service’ is totally going to be the Uber of cube farms; I cannot understand why you would refrain from demanding that your giant stacks of cash actually buy you something, like, say, serious voting rights or having the money secured against the assets you are leasing from the CEO-for-life; or both.
We have entered into a number of transactions with related parties, including our significant stockholders, directors and executive officers and other employees. For example, we have entered into several transactions with our Co-Founder and Chief Executive Officer, Adam Neumann, including leases with landlord entities in which Adam has or had a significant ownership interest. We have similarly entered into leases with landlord entities in which other members of our board of directors have a significant ownership interest, such as through ARK (as defined in “Business—Our Organizational Structure—ARK”). See “Certain Relationships and Related Party Transactions”. We may in the future enter into additional transactions with entities in which members of our board of directors and other related parties hold ownership interests.
Transactions with a landlord entity in which related parties hold ownership interests present potential for conflicts of interest, as the interests of the landlord entity and its shareholders may not align with the interests of our stockholders with respect to the negotiation of, and certain other matters related to, our lease with that landlord entity. For example, conflicts may arise in connection with decisions regarding the structure and terms of the lease, tenant improvement allowances or termination provisions. Conflicts of interest may also arise in connection with the exercise of contractual remedies under these leases, such as the treatment of events of default.
But he did volunteer not to receive a salary for 2018 (wait- salary? I thought they said they didn’t have any kind of employment agreement with so why would he get a salary?).
And it’s all fine because:
Pursuant to our related party transactions policy, all additional material related party transactions that we enter into require either (i) the unanimous consent of our audit committee or (ii) the approval of a majority of the members of our board of directors. See “Certain Relationships and Related Party Transactions—Policies and Procedures for Related Party Transactions”.
So that would be the unanimous consent of a bunch of people who are engaged at the whim of Mr Neumann or the majority of another bunch of people who serve at the whim of Mr Neumann - which of those alternatives is of course up to the whim of Mr Neumann.
The prospectus is essentially saying hand over your money to Mr Neumann and trust that he will look after it nicely and give it back to you at some point with some more money - except of course that Mr Neumann will not personally be involved or legally responsible for your money in any way - and Mr Neumann has told you that he has no intention of giving you anything.
I would quite like to see these sorts of businesses turn up on Dragon’s Den.
“So, you want me to give you lots of my money which you are going to use to pay yourself rent on properties you own? You’ve never made any money and have no intention of generating a profit at any time in the foreseeable future? And you’re not even prepared to hand over any significant degree of control over the company? I just give you the money and expect not to get any return?”
